The rate increases initiated by Hapag-Lloyd in the first quarter and implemented during the second quarter resulted in improved revenues and operating results for the third quarter, although market conditions remained challenging. Average freight rate rose year over year by 8 per cent to US$1,647/TEU.
Transport volume in the third quarter amounted to 1.28 million TEUs and revenue of EUR 1.765 billion was 15 per cent higher than in the same period last year. EBITDA for the third quarter was EUR 164.1 million, which represents a year-over-year increase of 56 per cent. Earnings before interest and taxes (adjusted EBIT) more than doubled to EUR 86.6 million (previous year: EUR 36.7 million). This more than made up for the operating losses incurred in the first half of the year. In the third quarter, Hapag-Lloyd reported earnings after interest and taxes of EUR 45.6 million (previous year: EUR 9.6 million).
“Given the intense competition and gloomier economic prospects, these are good results. Unfortunately, we were not able to continue the upward trend in freight rates achieved during the third quarter,” said Michael Behrendt, Chairman of the Executive Board of Hapag-Lloyd.
During the first nine months of fiscal 2012, the average freight rate rose by 2.2 per cent to USD 1,574/TEU and transport volume by 2.3 per cent to 3.96 million TEU. Revenue climbed to EUR 5.16 billion, an increase of 14.6 per cent. EBITDA after nine months was EUR 245 million, with adjusted EBIT of EUR 17.9 million. The Group’s net result was a loss of EUR 94.1 million. The sharp rise in energy costs weighed heavily on these results, with transport expenses, of which bunker fuel is the largest component, up nearly EUR 750 million compared to the same period of time a year earlier.
The company invested EUR 692.5 million in ships and containers during the first nine months. After the delivery of two new vessels in the third quarter, Hapag-Lloyd’s order book now comprises eight ships of 13,200 TEUs each, of which one was due for delivery in November. However, financing commitments have already been secured for outstanding orders for new vessels and planned investments in the container fleet. Hapag-Lloyd holds liquidity (including undrawn credit lines) of more than EUR 650 million.
The fourth quarter will be dominated by the intensifying effects of the debt crisis in the eurozone. Liquidity constraints and declining consumer demand mean that retailers and manufacturers are reducing inventories. This noticeably reduces demand for transport services in these markets, especially in Southern European countries.
Despite the burden from high energy prices and the increasingly gloomy economic outlook, Hapag-Lloyd aims to achieve positive operating results again for the fiscal year as a whole, providing there is no fundamental escalation of risks in the fourth quarter.